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Listening to the pundits speculate about why the polls failed to predict the Clinton win in New Hampshire, why they had prematurely counted out McCain, Huckabee and Obama, why they had paid so much attention to Thompson and why they can’t call the nominees yet, has caused me to think about experts and expertise, particularly in marketing.

The presidential elections are intensely competitive, often interactive, marketing campaigns. As such, they fascinate me.

For once, the political pundits were talking about something that I know a lot more about than they do. They were talking about marketing research, even though they talked in terms of polls and elections, rather than surveys and purchases. Polls = surveys and elections = a purchase, or product selection. What’s different is that in elections, the products talk (I know, the analogy breaks down with Elmo).

What was amazing to me is that there were the pundits doing exactly the same thing as marketing executives, agency executives and consultants that I have been observing for decades. They blindly project past behavior and intentional data (what people say they will do) into the future. They are very, very often wrong. But they are highly paid, so they have to look right. So what do they do? They make up plausible stories.

Sometimes, they even go out and find the data that will back up their stories. What’s going on here?

The network’s producers call up an expert who they are about to book for a show. They ask that expert what he/she thinks. Producers are not going to provide an airplane and limousine to the studio for an expert who was simply going to say, “we just don’t know.” They want people with definite opinions, strongly held. They want controversy. They want plausibility. The pundits are all too willing to provide that. They spin out plausible explanations with great certainty.

The same is true with the marketing pundits, when they are making predictions.

I’m standing up, like that little boy in the Emperor’s New Clothes, and telling you there’s nothing there. They don’t have a clue.

Not when they’re explaining the past or predicting the future or describing the present. Why? Because there is much more that they don’t know than they do know. Furthermore, they don’t know it, because if they knew it, they would know it. You don’t know what you don’t know. So, while do you know that you don’t know some things, you severely underestimate the things that you don’t know.

So, they are saying things like the Clinton voters showed up in greater numbers than were expected because they were angered by other candidates ganging up on Hillary, or because of Hillary’s becoming choked up. Never mind that this was not reflected in the exit polls. They quote their mothers, their friends, or passersby in the streets.

The actual experts in polling, who are, for the most part, pretty dull and therefore don’t make it to television interviews, are saying that it was probably the Bradley effect (blacks do worse in the actual elections and they do in the polls), or the fact that lower income people to not like to be interviewed and have a higher refusal rate, and favor Clinton. They would be likely to refuse both polls prior to the election, and exit polls. These, to me, are the most likely explanations, but they are not as politically correct as other explanations. Notice that I said “most likely.” The so-called experts rarely use this or equivalent phrases. The fact is, that we don’t know, and may never know.

So, what are we to do? In politics, we have to make predictions. In business, we have to make forecasts. One very successful marketing vice president, who came up from marketing research, when I asked him once about forecasting said, “give them a date, and give them a number, but never, ever at the same time.”

I used to be asked, “Based on the focus groups, will the product be successful?” I suspect that my answers were rather disappointing. Now, I am never asked that question because I make it clear beforehand that focus groups and surveys can’t predict a product’s success, although they can sometimes predict a product’s failure when there is a fundamental flaw in the product. There are just too many things that have to go right for success. For instance, there is no way to predict what competitors will do. What if an iPod or an iPhone comes along? What if you are Alta Vista, doing a great job, and a Google comes along?

There are last-moment, decisive factors that hit people when they are in the privacy of the voting booth, or are about to click their product choice, or standing at the shelf in the store.

People do not know what they are going to do. They don’t know what they will buy or not buy (or vote). They do not know how strongly held their preferences are. They do not know “what it would take to get you to buy the product,” a favorite, stupid question that marketers like to ask. Or, “On a scale of one to 10, 1 being least likely and 10 being certain, how likely are you to vote for your previous choice.?” (Who says there are no stupid questions?)

If people (including pollsters) can’t predict their own behavior, how do you think they’re going to predict others’?

So, what can focus groups, polls and surveys tell us? They can tell us about many obvious and hidden attitudes, opinions, beliefs, wishes, fears, etc. that may need to be addressed. They can tell us, for instance, that people are frustrated because their music libraries are a mess. They can tell us that the iTunes/iPod system of keeping them organized addresses that frustration. They can’t tell you that these will displace the ubiquitous Walkmans and CD players. They can’t tell you that these will take over the music industry.

They can’t tell you that an obscure Arkansas governor (Bill Clinton) can go up against a wildly popular president who just won the Gulf War (1), who the Democrats were despairing about running against, and who had lost the first primaries, could go on to win the presidency.

The Taurus, wildly popular in its time, was ridiculed as a “jelly bean” in focus groups. The VW bug, as well as its revived version decades later, was also ridiculed, but found its niche, who probably weren’t well represented in the surveys and focus groups. Respondents loved the Edsel and New Coke.

The Oracles are frauds. Predicting is a con game. Historians are fiction writers. Stock pickers are just racetrack touts. Forecasting is only on target by chance. Get it?

Sometimes, you just have to refine your guesses by marketing research, then put them out into the marketplace and let reality decide.

The main lesson: Clues are clues. Reality is reality. Sometimes they coincide. Sometimes… You get the picture.

In an article last Monday in the Wall Street Journal, reporter Emily Steel described the growing trend of using online social networks — both existing and company-encouraged — for marketing research. It’s a very dangerous trend, as I point out in my letter to her. Many companies are headed for disaster if they give undue weight to the opinions expressed on their online networks.

However, it didn’t cover the major pitfalls, of which there are many. (Full disclosure: I am a marketing consultant who runs face-to-face focus groups and telephone focus groups. I’m a founder of the Qualitative Research Consultants Association and member of its Professionalism Committee, although I am speaking officially for neither.)

I have rejected the methodology of online groups for reasons enumerated in detail in the following article:

In brief, the written word does not allow for the reading of emotions that live focus groups do, and the reading of these emotions is absolutely necessary for the interpretation of the results. (E.g., How enthusiastic are they? Are they hesitant? Are their remarks ironic and sarcastic? Are they coming from their heads or hearts? Are they mildly annoyed or royally pissed off?)

However, these kinds of standing panels have a problem that I didn’t discuss in the article. It is one of sample bias. As you describe, people are continually dropping out of the group and being replenished. This severely skews the kind of people who remain in the panel, in ways that are virtually impossible to account for in interpreting the findings. It is well known that participators are radically different than non-participators and ex-participators. For instance, probably the more enthusiastic and/or more lonely people (including social misfits) tend to stay in. So, you keep the enthusiasts, for whom the panel becomes a part of their social life (as mentioned in your article). They are sometimes less prone to criticize, but sometimes more prone to criticize. The point is, one never knows. But as this sample becomes more and more distorted and unrepresentative of real customers, you have a disaster waiting to happen.

On the other hand, these panels are a wonderful source of ideas and a way to make sure that certain actions and wording do not antagonize loyal customers.. But they are notoriously unpredictive of success in the marketplace. The Edsel automobile and New Coke are but two of many examples of going to the wrong people and asking the wrong questions. Many of the .com failures were guided by discussions on company forums, forgetting that most real people to not hang out on forums, especially for prolonged periods of time.

I hope that, as a reporter, you will follow this phenomenon. You will have many juicy disasters to cover. When you ask, “What were they thinking and why were they thinking it?” I hope that you will keep this letter in mind when they tell you “That’s what our customers told us they wanted.”

Here is an old joke, that I’m not telling for the humor. I’m telling it to make a point.

An elderly man goes into confession and says to the priest, “Father, I’m 80 years old, married, have four kids and 11 grandchildren, and last night I had an affair. I made love to two 21 year old girls. Both of them. Twice.”

The priest said: “Well, my son, when was the last time you were in confession?”

“Never Father, I’m Jewish.”

“So then, why are you telling me?”

“Are you kidding? I’m telling everybody!”

When you understand what is driving that man, you will understand more about marketing than you can possibly learn in all the marketing books put together. More about this in future blog posts, but there is breaking news that I want to “tell everybody!.”

On Tuesday, at MacWorld, a product was officially announced that I have been beta testing. This releases me to talk about some details that have been publicly revealed, although I still can’t talk about many of the other details.

MacSpeech has announced a completely new voice dictation product for the Mac. One that is so accurate that it can be used by professional writers.

For those of you who don’t know what voice dictation is, or who don’t yet appreciate its significance, let me explain. Simply, you talk and your words magically appear on the screen, like in a science fiction movie.

I have been beta testing this new product for the last three weeks. While I have been publicly critical of MacSpeech’s previous product, iListen, this product, MacSpeech Dictate, just blows me away. It has sensational accuracy with only 5 minutes of training. That means that you can dictate into any program on the Mac and have your words appear.

Now I’m a pretty fast Dvorak typist, around 120 wpm.

But, when I’m writing books, articles and speeches, that’s not fast enough, and my arms and hands get tired, even with the 1/16th lower finger movement that Dvorak typing requires (look it up). So I have written my last two books in Dragon NaturallySpeaking, which is a Windows program. At this point, with continual training and corrections, I’ve gotten it beyond 99.7% accuracy. But, I had to maintain a separate Windows machine to do it, which was a great inconvenience, and ruled out voice dictation when I traveled, when I do a lot of my writing.

Ever since it’s been possible, I’ve been running Dragon NaturallySpeaking on my Mac. I has been an acceptable solution, even though it takes considerable memory resources, disk space, and central processing power. It also requires me to run Windows, putting me at considerable risk, even though I have a firewall, anti-spyware software, antivirus software, etc. Windows also requires constant maintenance, and is unstable, so it can’t stay up for days and weeks on end like my Mac. I consider Windows to be an almost criminally unsafe product. Also, I have to continually transfer my dictation into whatever program I’m using, such as my word processor and my e-mail.

None of these drawbacks is terrible, but all of them together add up to considerable inconvenience. Like most Mac users, I can work much longer and conveniently on the Mac side of the machine. The Mac aesthetics are not just a matter of being pretty. The machine is much easier on the eyes, cutting down on fatigue, something that is almost never mentioned.

Then, I broke my arm skiing three weeks ago. I found myself totally dependent upon voice dictation, except that using the trackball to highlight text, copy and paste it was excruciating. In an extraordinary bit of coincidence, MacSpeech happened to send me a beta copy of their new program, MacSpeech Dictate, a couple of days after my accident. I was pretty skeptical, since I found their previous program unacceptable for sustained writing.

Even though some parts of it were still under development, it blew me away. (The MacSpeech people just revealed that it has licensed the Dragon NaturallySpeeking speech recognition engine, and is adapting it to the Mac. So, MacSpeech Dictate is using the Dragon voice recognition engine.) It also dictates right into my word processor, e-mail, writing program (Scrivener) and my blog post editor (Ecto). I can dictate so fast it’s almost frightening. Steven Wright jokes that he got hurt in a speed-reading accident. I feel like I’m about to get injured in a speed writing accident.

What’s so important about writing fast? Time saving is the least of it.

It makes my writing better. The processes of writing and editing should be separated. With voice dictation, I can close my eyes or look at the ceiling and just think my thoughts without distraction. When I look at the screen, there are my thoughts! I can then go back and polish. This has made a dramatic difference in the quality of my writing. Anything that gets in the way of putting thoughts onto paper is a distraction and decreases the quality. With voice dictation finally accurate enough to use on the Mac, all I have to do is think the thought and it magically appears in whatever program I want. Nothing else gets in the way.

Furthermore, my typing speed is about 2-3 times faster, since I make virtually no mistakes and can dictate much faster than I can actually type. So, I can sail through my e-mail at dazzling speed.

This entire blog post was done with MacSpeech Dictate, with well over 99% accuracy.

I want to congratulate the folks at MacSpeech. They are a living lesson in word-of-mouth marketing. I was publicly critical of their previous product. Instead of ignoring me or getting defensive, they contacted me and asked if I would like to work with their technical support in increasing my accuracy. Their technical support put in hours increasing my accuracy, but still, the fundamental design of the program and how it made corrections was just was too unwieldy for me to use. I stayed on as a beta tester mostly on the strength of their Customer Evangelist’s enthusiasm (thanks Chuck Rogers) and complete confidence that things would get better. What they couldn’t tell me was that they were coming out with an entirely new program, based on Dragon.

They were so customer oriented and enthusiastic about their product that I hung in there with them. As a result, I am now the poster boy for the expression “The biggest skeptic is the biggest convert.” I’m also going to tell thousands of people about the program via my speeches and blog, and demo it every chance I get. I can now also enthusiastically recommend the Mac, since it now has voice dictation. (I would never recommend that anyone but a very sophisticated user put Windows on a Mac.)

My arm is feeling better, but I won’t ever go back to Dragon NaturallySpeaking in Windows. Although I will leave Windows on my Mac just in case I need to run another Windows program, I really don’t think I’m ever going to see Windows defacing my Mac ever again.

WHWL? (What have we learned?)

if you’ve got the goods, stay with your strongest critics, work with them, acknowledge that they may be right, take their suggestions. You never know who they will tell, who they know, how many thousands of people they can reach.

Get them involved in product improvement. It’s very hard to be a net detractor for a product you have helped develop. They will, however, not be shy about criticizing you, usually constructively.

Be straight with customers. Don’t make believe your product is better than it is. if you tell the truth, you’ll always be reality based and fix real things. If you distort, you’ll be fantasy based and start believing your own fantasies. You will break a lot more than you will fix.

Make your customers feel like that 80 year old guy. Well, as close as you can get. These days, people only talk about the sensational.

Breaking News: MacSpeech Dictate just received Best of Show at Macworld! Congratulations!

Oh, by the way, the new Apple announcements at Macworld are pretty good too, but you can read about them elsewhere.

it reminds me that I got up in a word of mouth marketing Association meeting and publicly criticized two Dell and Microsoft product managers for a presentation in which they each showed how they were creating what I call artificial word of mouth. As I recall, they were going to create events that people would talk about, rather than present genuine advantages about their product that were so outstanding that people would talk about them. Later, out in the hall, the Microsoft product manager showed me Vista on his laptop. I asked him to show me some features, other than cosmetic ones, that would actually get me to go out and switch from either XP or from a Mac. He had none. That’s when I told him that no amount of word-of-mouth marketing was going to get him anywhere.

The rest is history. I didn’t get the Microsoft account. They didn’t get a successful word-of-mouth marketing program, even though they got on the networks with a giveaway for flight into space. That was worth talking about., but didn’t give anyone any reasons to actually switch to Vista, especially in the face of all of the negative word of mouth that persists to this day, over a year later.

Mac’s new operating system, Leopard, on the other hand is a smashing success. Why? Because they actually have several features that will get people to go out and spend their hard-earned money on an upgrade, or even to switch from Windows. Keep in mind, this is in a world where real people don’t even know what an operating system is.

Dell, on the other hand, understands that it’s about the product, not the buzz. They Have taken a whole range of steps in support, software, and hardware that has caused them to turn around.

BTW, come back Tuesday afternoon to read about an announcement about a Mac program that I think will be truly revolutionary.

The New Hampshire Primary was a cautionary marketing tale. It shows us why surveys (polls) can be very misleading.

The polls missed the Clinton victory by a mile yesterday, yet they were right on target with the McCain victory. Why?

No one knows exactly what happened for sure yet, but several possibilities illustrate some of the pitfalls in marketing research.

First of all, there is the assumption that you can believe people when you ask them what they have decided to do in matters of simple choice like whether they have a preference for Coke or Pepsi, or which candidate they favor. In most cases, this is a reasonable assumption, and most of the time, polls are accurate.

Other times, what looks like a simple question is not. It turns out that in the minds of New Hampshire voters, McCain versus Romney was one of these simple questions. Though polls got it right, both on preference and amount.

On Clinton vs. Obama, not so simple, on many grounds.

Here are some of the possibilities that are yet to be investigated and quite possibly never definitively determined.

(1) What if people’s minds are not made up? Not a problem, at least as far as taking a snapshot. While that would make prediction difficult, with these people would have turned up as a large number of undecideds. This is not what happened. So, the pundits say, the people didn’t make up their minds at the last moment. But what if they were undecided, but didn’t know it? What if they thought they favored one candidate over the other, but this was a weakly held preference and they were easily swayed by last-minute remarks that they heard on the radio or from their friends, on the way to the voting booth?

So, when people hold an opinion, the strength of the opinion is just as important as the opinion itself. Sometimes opinions can be held so weakly that they might as well not be an opinion at all. But that’s not the way it’s experienced by the person. In the absence of a challenge, it’s often experienced as an opinion that is pretty firmly held. So it is of no use to ask the person in the survey, “on a scale of 1-10, how strongly do you hold that opinion?” It’s also equally nonsensical to ask people what it would take to change their minds.

So, the first possibility is that they changed their minds at the last moment, perhaps even in the voting booth, but did not know until that moment that their previous choice was weakly held.

(2) People may have in fact held a very strong beliefs, but changed their minds quickly and decisively when they saw, for instance, Hillary Clinton cry the day before the voting. This may have been too close to the voting for the polls to have picked up. But, I don’t think so because it wasn’t picked up in the exit polls either.

(3) Here is the most intriguing one for me: What if racism isn’t dead? Well, of course racism isn’t dead. It didn’t evaporate just because Obama it isn’t running as a black candidate. In that case, many people (it would only have to be about 10% to account for the data) might not want to tell a pollster that he or she was not voting for Obama, even though they thought that Obama was the best candidate. They might be feeling guilty, or they might expect disapproval, or they might just experience a vague sense of unease about Obama that makes them feel vaguely uncomfortable. Or, they may be worried about being perceived as racists even though they are not. So, when asked, they blurt out “Obama,” and maybe even mean it at the moment. But in the privacy of the voting booth, that vague sense of unease — which, I suspect, is the main way that racism is experienced among people who are just mildly racist, especially those who are ashamed of it or are unaware of it— rears its annoying little head and causes a private little finger twitch that never gets reported.

This is a well-known, and well-documented effect called the Bradley Effect, or the Wilder Effect, where blacks often poll with stronger support than they ultimately show in the polling booth. Even exit polls often say that the politically correct person won, but when the votes are counted, the politically correct is not the politically erect.

It will be interesting to see what happens in the primaries versus the caucuses. For instance, in the Iowa caucus, people had to stand up in front of their peers openly and declare their allegiance, unlike in the New Hampshire secret ballot.

So the marketing lessons here are:

“Take a survey [poll]” isn’t always the answer.

Simple questions are often not.

Asking questions gets answers, but not necessarily the truth.

People don’t always know what they believe or how strongly they believe it.

People often have beliefs that they don’t know they have.

People can’t even predict their own behavior.

People often say things based upon what they think you want to hear.

Distrust after-the-fact explanations from pundits, including me.

What I am really saying here is things are not as simple as they seem. If you have a product with any degree of controversy you are navigating a mine field when you try to assess public opinion. Even professionals don’t always know what they are doing.

I believe that there is one, underlying thing that Apple is doing, and I wonder if Steve Jobs has realized it:

All of the great, wildly successful products, services, companies, institutions of the last decade or two have all done one thing at the root. They have helped the customer make Better Decisions Faster: not only faster in buying, using, recommending the product itself, but also helping the customer use that product to make better decisions faster in their lives.

For instance, Apple makes it faster to get on the Internet; operate a computer; organize, find, store, carry & access their music, photos, etc.

Amazon has done the same for books, eBay for collecting, Google for searching & reaching the customer at the exact point of interest, Yahoo for accessing certain types of content, Prius for making a certain social statement, Toyota in general for making it easy to buy a more reliable car, etc.

An the root of all successful marketing these days, is helping the customer make Better Decisions Faster. I have always been able to find several major ways to make it faster for your customers to decide on your product, if your product is the better decision.

When you enable customers to make better decisions faster, you accumulate customers faster, your customers get to be better users faster, they feel better about the whole experience, so they spread the word faster.

I don’t know where the word of mouth is on this one. You just HAVE to see the new Harry Potter movie (Harry Potter and the Order of the Phoenix) at the IMAX. Turns out that (only at IMAX) the last part is in the most mind-blowing 3D you’ve ever seen. The rest of the movie is great, too. They managed to resist overdoing the magic special effects (can’t believe as a magician I just said that), focused on the important things: values, relationships, characters, etc.

I haven’t seen any mentions of the 3D IMAX version. Found out about it by WOM from my daughter, who dragged us to see it. I wasn’t even going to go because I didn’t enjoy the last one enough to bother. I’ve never seen a movie that was better than the book, except for “The 10 Commandments.”

Once you see it, you can’t not see it. I won’t spoil the fun by pointing it out.

Spoiler Alert: If you don’t know about it, stop here and look for it.

Yes, it’s intentional. The designer, Lindon Leader, had some very interesting things to say about it.

What’s this doing in a marketing blog? Glad you asked.

First of all, it’s a great example of knowledge blindness. Once you see it, you can’t NOT see it.

Secondly, why make the insignificant significant? Why elevate a minor little surprise into a major distraction, like almost every web site?

I was struck by the question that the logo designer says he is always asked:

“Why choose to keep the arrow so subtle? It seems to show remarkable restraint. Weren’t you or the people at FedEx ever tempted to make it more obvious with an outline or a different color?”

It’s so obvious that I might not have asked the question, but I’m glad the interviewer did:

He replied that the arrow is one of the most mundane graphic devices. There is nothing unique or particularly strategic, from a marketing point of view, in an arrow as a brand identifier.

Then Lindon went on to say,

The power of the hidden arrow is simply that it is a “hidden bonus.” It is a positive-reverse optical kind of thing: either you see it or you don’t. Importantly, not “getting the punch line” by not seeing the arrow, does not reduce the impact of the logo’s essential communication. The power of the logo and the FedEx marketing supporting the logo is strong enough to convey clearly FedEx brand positioning [Speed & Precision]. On the other hand, if you do see the arrow, or someone points it out to you, you won’t forget it. I can’t tell you how many people have told me how much fun they have asking others “if they can spot ‘something’ in the logo.” To have filled in the arrow, or to somehow make it more “visible” would have been like Henny Youngman saying “Please take my wife” instead of “Take my wife. Please.” Punch lines that need to be explained are neither funny nor memorable. (Emphasis mine).

In other words, it’s hidden, surprising, memorable, unusual. It’s one of life’s little pick-me-ups on an otherwise boring truck, envelope or uniform. So, it causes Word of Mouth. People like to point it out, or ask others to spot it. Like I’m doing now.

(FedEx did not pay for this ad. That’s the point.)

I’ve always said that FedEx didn’t succeed, as most business books state, because of its brilliant logistics breakthrough of sending the packages to a central point (Memphis), sorting there, then sending back out. They succeeded because they were beneficially unusual and constructively quirky. In those days, secretaries sent packages. They told secretaries they would look good because they would positively, absolutely DELIVER overnight. In those days, reliable delivery was as unusual as a customer-oriented phone company is today.

(On the day I wrote this, an iPhone customer got a 300 page bill, itemizing every text message, from AT&T, delivered in a box. It made the national news. No, not a FedEx box. I looked. Wouldn’t that have been perfect?)

Is Apple’s goal to overtake the PC in market share? Jobs said, “Our goal is to make the best personal computers in the world and make products we are proud to sell and recommend to our family and friends. We want to do that at the lowest prices we can.

”But there’s some stuff in our industry that we wouldn’t be proud to ship. And we just can’t do it. We can’t ship junk,“ said Jobs. ”There are thresholds we can’t cross because of who we are. And we think that there’s a very significant slice of the [market] that wants that too. You’ll find that our products are not premium priced. You price out our competitors’ products, and add features that actually make them useful, and they’re the same or actually more expensive. We don’t offer stripped-down, lousy products.“

This isn’t a lot different than the official statements from many companies. The difference is that Jobs means it and lives it.

As quoted in MacWorld today. He was announcing the new ILife and IWork 08 suites.

I found the WOMMA (Word of Mouth Marketing Association) conference in Washington last month both exhilarating and disturbing. I’ve been worrying about the current state of word-of-mouth marketing ever since.

It was quite a turn-on to see so many people enthusiastic about word-of-mouth marketing. But, after Andy Sernovitz’ inspiring opening remarks about the simplicity of word-of-mouth marketing – it’s all about the simple idea that happy customers recommend you, which grows your business – it went rapidly downhill for me with subsequent speakers and panelists. And in a very disheartening way.

They talked mostly about technique rather than strategy

What disturbed me was an almost total concentration on techniques, methods and tactics rather than purpose, goals, objectives and – above all –strategy.

Granted, I didn’t see every presentation and I understand that several speakers did mention strategy. Also, in all fairness, many of the presenters on panels had only about 12 minutes to present. Nevertheless, I would assume that when you have 12 minutes, you present the most important essence of what you are doing. Also, there is tremendous pressure at a conference to give people nuts and bolts “how to’s” so that people can feel that they came away with something practical.

Nevertheless, there is almost a Christmas-morning delirium about our new toys, together with an irresistible urge to unwrap them and start playing with them. But, let’s not take our bicycles right out into the snow yet. Let’s spend a little more time on strategy.

Why? You can have a good strategy and bad tactics and still win because you quickly adjust tactics to feedback. With the right strategy, you’re in the right place at the right time, doing the right kinds of things (which may need improvement).

Conversely, good tactics will not make a bad strategy work.

You can even have a good strategy in the wrong place at the wrong time, so that neither good strategy nor good tactics will work. Think of the Iraqi war: Free markets and representative, constitutional democracies are good strategies to build nations. Getting rid of a dictator is a good first step tactically. But in the midst of conflicting religious and ethnic fanaticism, these strategies don’t work. They lead to civil chaos. The efficient, tactical win at the beginning was well executed. But the strategies were wrong.

Back to WOMMA. Even companies like Dell and Microsoft – who I respect tremendously – talked about all kinds of tactics designed to get people talking, instead of concentrating on the fundamental changes in their products that would get people to talk in ways that would cause fundamental product evangelism, loyalty and trust.

Instead, many speakers throughout the whole conference talked about artificial, superficial ways that will get people talking about how unusual the message itself was. So there is a proliferation in word of mouth circles of fancy videos, contests, and all kinds of programs that are more designed to get people talking about the medium itself — hoping that the “buzz” will somehow rub off on the product image — rather than talking about the product.

What I was craving was somebody getting up and saying, “here’s what we’re building into our product: things that will blow people away and here’s what we are doing to motivate and enable people to talk about that.” I’m sad to say that I heard absolutely none of that.

For instance, what is Microsoft building into their new operating system Vista that would get me to install it on my computer? Or, how are they going to get me to realize that a new feature that I might ignore is extremely beneficial to me, in fact so beneficial that I will rave about it to my friends? What is Dell building into its computers that would get me to buy one instead of an Intel Mac? No, they are talking about admirable and wonderful programs that keep them in touch with and responsive to various segments and niches through blogging and many other creative programs. But these are what should come after building products that are remarkable, outstanding, extraordinary and unique.

This is like advertising was before and after its golden age. Before the golden age of advertising, people just put drawings of the product in the mass media, without any benefit statements or even descriptions. Then, advertising hit its stride and discovered its true strengths: bringing dramatizations of the unique benefits of the product to the masses. It was “salesmanship in print” in the best sense. It zeroed in on the most beneficial, unique aspects of the product and dramatized them in an entertaining way that got attention. At least, the best of it did. Then, the side show took over the circus. Most of it — to this day — gave up dramatizing the benefits and went for image instead. “Sell the sizzle, not the steak” became the rallying call for the hypemeisters. Advertising lost its way and just tries to make an intrusive impression, confusing getting attention with fundamental persuasion. Advertising is now judged by its entertainment value rather than its persuasive results. For instance, after the Super Bowl each year, there are many published polls naming the commercials voted “best” by viewers. So, you can win “best commercial” and go out of business because the commercials didn’t cause any sales, as 17 out of 18 of the Dot.com companies did in, I believe, 2002.

Advertising that calls attention to itself — instead of something related to the product — almost never works. Advertising history is filled with examples. Many of them won awards. But the products failed.

In the same way, the present word-of-mouth marketing movement, I’m afraid, may be losing its way. Marketers need to spend more time creating products that are so unusually good that people will recommend them to their friends and providing the mechanisms to do so. Instead, people are focusing on the superficial aspects of our newfound ability to get people to talk about almost anything as an end in itself, in the hope that some of it will rub off on the brand.

This will be just as self-defeating as it is presently in advertising. Pretty soon there will be so much viral video and so many pseudo-sincere (or even actually sincere) company blogs that people will just ignore them. There will be so many “agents” who were given free samples, that people will learn to probe about whether they are an agent and stop listening to their friends’ recommendations.

Update: After I wrote the above, I came across this brilliant presentation of John Moore at the Jan, 2006 Orlando WOMMA conference, talking about Creationist (the hype marketers) vs. Evolutionist (people focused on the product and customer) marketing. Just one quote:

“The Creationist WOM marketing mindset is about making the WOM activity more remarkable, while the Evolutionist WOM mindset is more about making products and experiences more remarkable.” Well worth watching:

Update: So far, the following prediction was wrong. [See the update at the end] I still think that it will be true, when Apple finally gets around to making their Leopard announcements. It was a big disappointment to not hear anything about Mac at MacWorld Expo. Maybe instead of renaming Apple Computer to Apple (which was one of their “big” announcements at MacWorld), they should rename MacWorld Expo to iWorld or iPod Expo. Did they forget about the Mac?

I have long been writing and speaking about the Mac as the product that has the worst word of mouth to sales ratio, probably in the history of marketing. In other words, it probably has the best word of mouth of any present product. Yet, as of this writing, it only has 7% of the computer market. I often use it as an example of the fact that we have to curb our enthusiasm when we start talking about word of mouth overriding all other marketing considerations. In this case, what is holding back Mac is the perceived anticipation of a great deal of pain in switching, together with the fact that Windows programs will not work directly on a Mac without a great deal of inconvenience, such as rebooting or using other programs such as Parallels or Crossover to switch back and forth.

Here are my predictions: Next week, on Tuesday, January 9th at MacWorld, Steve Jobs will announce that the new Mac operating system called Leopard, OS X 10.5, will directly run Windows applications without needing Windows. That’s right, you will be able to install and run any Windows program directly into the Mac without having a copy of Windows on the machine! [Update: they made NO Leopard announcements!]

This will be the biggest announcement in the computer industry in the last decade or two.

I further predict that, if and when it occurs, this will produce the biggest word-of-mouth blowout in history. Combine the pent up positive word of mouth of the Mac with the negative word of mouth toward Microsoft, Windows, XP, Vista, the Windows PC makers like Dell, viruses, adware, spyware, malware, etc. and you have an explosive combination. This will be the most interesting test in years of the unleashing of word of mouth. It will demonstrate to the entire marketing community what happens when you follow my marketing approach of Blockbusting: find the decision blocks, bust ’em up, and you will see exponential growth.

I have been following Technorati and Google searches for months now to see if anyone appreciates what is about to happen. While I’m not the first to predict Windows apps running natively on the Mac, there are very, very few of us making that extreme prediction. Most are predicting some kind of hybrid, virtualization solution.

To my knowledge, I’m the only one predicting the landslide success of Mac in the next year. It probably won’t be immediate, but as the snowball gains momentum, it will grow exponentially. First, people will need the word of mouth of infomediaries like David Pogue and Walter Mossberg, plus their own friends nad colleagues — particularly the non-technical — to see that it actually works, even with legacy programs. Assuming that it does work for the non-technical, it will throw the Mac into production problems, especially when the Vista virus and other problems start spreading.

By the way, I was among the first to predict that a way would be found to get Windows to work on the then-new Intel Mac. It caused a lot of WOM among the tech savvy and a lot of sales, but not among the corporate people who would have to use it seamlessly at work. Now they can. Now we’ll find out that a lot of corporate IT people have Macs at home.

Advanced congratulations to Steve Jobs and the entire Apple team. You’ve finally completed the chain. (You now need my consulting to figure out how to handle the tornado.) [Update: There was an immediate crescendo of boos after the non-announcements of anything Leopard, Mac, iLife, iWork, etc., or even anything computer, except to take out “Computer” from their name]

Update:

Well, I was wrong about the announcement, but I stand by the fact that this is the biggest WOM disparity in the history of marketing, just waiting for an explosion.

[The only other time I was wrong was in 1972, when I had thought I had made a mistake! 😉 Brings to mind the quote from George Bernard Shaw, “The longer I live, the more I see that I am never wrong about anything, and that all the pains I have so humbly taken to verify my notions have only wasted my time.”]

I also think it would be the smartest thing that Apple could ever do. In fact, the best other thing that they could do is make OS X work on PCs. Sure, they’d lose a few Mac sales, but make it up on software sales. If they announced one or the other this month, they could get a lot of the Vista sales, and a lot of the sales of new boxes with Vista on it.

Now, I’ll just have to buy an Intel Mac MacBook and try Crossover, which purports to do just what I predicted, but with an additional program, still without windows. Failing that, I’ll use Parallels, but will have to run Windows. [In case you’re wondering, I want to run Dragon NaturallySpeaking 9 (which I maintain a separate Windows machine just to use) and Delorme’s Street Atlas. There are no comparable Mac programs. For everything else I’ve found, the Mac equivalents are far better.]

Update July, 2005: Got an Intel Mac (MacBook Pro) in May, tried Crossover and Parallels, which didn’t work properly with Dragon NaturallySpeaking. However, VMWare Fusion works like a charm with Windows XP and Dragon. Parallels had all sorts of quirks with the USB headset and froze up constantly. Crossover wouldn’t work at all. With VMWare Fusion, it can now see my Plantronics Audio 500 headset perfectly, and the accuracy is well over 99% and getting better all the time.

It even works perfectly with my Olympus D-30 recorder, even in noisy environments like a car. I’m about to try it in an airplane. I can dictate on my daily walk, into a tiny recorder and have a new section of my new book, a blog post, article or whatever a few minutes after I get back.

The only problem is that I still have to use Windows. Now that I’ve been away from it for almost 2 years, I’m shocked by how amateurish it is. Also using Word 2007 to dictate into and I’m amazed at how bad the interface is. While there are a few minor improvements, they have further buried many of the most-used functions and won’t let them go on the custom bar. 5 clicks to change a template when it’s 2 clicks on the Mac version of 2004? What is with Microsoft? Their word of mouth gets worse and worse. Vista is almost totally rejected by sophisticated users. Their sales are on new machines. If Apple could come up with a way to seamlessly allow people to upgrade to OS X in their present machines, they would take over the market.

But it has to be seamless because fear trumps word of mouth, unless the word of mouth is addressing itself to the fear. But people can’t say yet that the conversion is easy for an ordinary, non-computer-savvy person to do. I don’t care how easy VMWare Fusion is, people need a simple way to switch, with Fusion built in and automatic conversion.

What an example of the kind of word of mouth no one wants to get for a new product!

So, how do you avoid such negative word of mouth?

Involve people like David Pogue as consultants from the beginning, so that you can build in features that reviewers will give positive reviews to. (He probably wouldn’t do it because of the conflict of interest, but there are other people who are just as astute and practical, just not such good writers!) But, I’m afraid that’s too superficial.

The truth is, you have to have the right philosophy, viewpoint, mindset, frame of mind – whatever you want to call it. Apple has a profound respect for the customer and an deep understanding of design. Apple understands the whole Decision Experience. That’s why the iPod isn’t just a player. It’s a whole system that makes all the decisions seamless, easy, simple and fun. Everything about the music experience is made easy, elegant, even beautiful: finding, tasting (trying), refining one’s tastes, acquiring, managing, playing, sorting, etc. (except for backing up and sharing).

Microsoft, on the other hand, has a profound understanding of cut-and-try: getting something out into the marketplace, then learning from the feedback how to gradually refine it. That’s why everyone is wary of Microsoft 1.0 anything. It’s OK if you are very early in a marketplace where no one has a product or no one has a good product, but everyone wants it. In other words, fine for wild innovators, which Microsoft has long-ago ceased to be. But against Apple???!!! Particularly iPod???!!!!!! No, I don’t think so. Microsoft just doesn’t get it — particularly doesn’t understand the overwhelming power of WOM.

I trust Apple to get it right the first time, then improve it. I don’t trust Microsoft to get it right until version 3.0 at least. That’s why I’ll unhesitatingly put Apple’s new operating system on my Mac, but wait for a long time (if ever) to put Vista on my Windows machines. (Written on a Mac by an ex-windows lover)

How’s this for a great product sample? It’s hilarious, but the reason I’m posting it is that it’s a great marketing example of giving out a sample in the hope it goes viral, I’m sure. As you probably know, I’m not a fan of gratuitous virality attempts, but I’m happy to participate in this one because the thing to be passed on is an actual part of the product instead of some video stunt that’s only tangentially associated with the product, just contributing buzz – otherwise known as noise – in non-word-of-mouth marketing circles.

Click on the link below, then click on the catalog (if you’re blocking Flash on websites, enable it for this site). Click on the lower right hand part of the cover of the catalog, and the pages turn, where you can sample pages from the parody catalog. A perfect way to sample, just waiting to go viral.

Background: I’ve recently gotten into home coffee roasting. It’s a growing trend that you’re going to be hearing a great deal about. The whole home coffee-roasting phenomenon is rife with wonderful word-of-mouth examples and case studies, about which I will be posting soon. [There is a whole universe out there that every marketer can learn a tremendous amount from in the worlds of green coffee bean sellers, roasting machines (including hot-air popcorn poppers!), grinders and coffee makers. The brilliant marketing and the blunders of these people provide some amazing examples of how to market products on extremely low budgets in long-tailed, niche markets.]

Anyway, I saw a post in Josh Rubin’s Cool Hunting Blog about a coffee maker, the Aerobie AeroPress, and landed on its website. I actually did not land on its home page, but on the page referenced in the Cool Hunting Blog, which is an info page. (Click here for the page)

Wow! It’s a masterpiece (I suspect because it is probably constructed by an amateur, probably the inventor himself. :update: see update at end). It’s better than the home page (pretty good, also) Almost the whole thing is carried by a series of testimonials, which they brilliantly call “reviews.” (I’m going to change my vocabulary over to mostly use the word “review” instead of “testimonial.”)

There is a list of short testimonials, whoops reviews, that are extremely specific and to the point. They are sourced from an impressive bunch of people, starting with “It makes the absolute best cup of coffee I’ve tasted in my entire life.” –Louis Singer –Cook’s Junction. Instantly, you are – or at least I was – hooked.

Notice an important principle of word-of-mouth marketing here: your customers can say things for you that you just can’t say yourself. If the headline were, “the best cup of coffee that you’ve ever tasted,” it would be totally unbelievable. Unless, of course, it was followed by a quote, thereby giving it credibility. There follow another 15 very interesting short quotes. Some general, some specific. Some with sweeping praise, others with short stories. Study these reviews carefully. They are a living lesson on the kinds of testimonials you want to elicit, using the techniques in my book. I could spend an entire workshop on just this one page, particularly these 15 testimonials reviews.

Then, and only then, once you are hopelessly hooked if you are a coffee lover, it is followed by five very short paragraphs under the heading “There Are Several Reasons Why AeroPress Coffee Tastes So Good:”

Total immersion of the grounds in the water

results in rapid yet robust extraction of flavor.

Total immersion permits extraction at a

moderate temperature, resulting in a smoother brew.

Air pressure shortens filtering time to 20

seconds. This avoids the bitterness of long

processes such as drip brewing.

The air pressure also gently squeezes the last

goodness from the grounds, further enriching the flavor.

Because of the lower temperature and short

brew time, the acid level of the brew is much

lower than conventional brewers. Laboratory

pH testing measured AEROPRESS brew’s

acid as less than one fifth that of regular drip

brew. The low acid is confirmed by coffee

lovers who report that AEROPRESS brew is

friendlier to their stomachs.

Notice, EVERY feature followed by a benefit. Simple. Elegant. Not a wasted word. (Wish I could write like that!) Look the paragraph above. Laboratory third party proof assertion, followed by confirmation. No hype adjectives. No BS. Totally believable. Hot damn, this is good.

Then, the question is going to be, “Well, how does it compare with my present methods?” So, a comparison of brewing methods follows, specifically telling you the shortcomings of drip brewing, espresso machines, pod brewers and French presses. These negative comparisons are not just bald, self-serving assertions, they are often put into the mouths of third parties, a.k.a. word of mouth.

Then, it tells the story of the invention of the AeroPress by Alan Adler, a Stanford University mechanical engineering lecturer who is also the inventor of the Aerobie, a Frisbee-like object that holds the record for the world’s furthest thrown object (about a quarter of a mile) and President of the Aerobie company, which has about 15 other extraordinary products.

AEROPRESS is the result of several years of applied research by inventor/engineer Alan Adler. He conducted numerous brewing experiments, measuring the brew with laboratory instruments. The experiments demonstrated that proper temperature, total immersion and rapid filtering were key to flavor excellence. He then designed and tested dozens of brewers before settling on the AEROPRESS design. The design was further validated by coffee lovers who tested prototypes in their homes. Adler has about forty U.S. patents and an equal number of foreign patents. He is President of Aerobie, Inc, Palo Alto, California and a lecturer in mechanical engineering at Stanford University. Adler’s best-known invention is the Aerobie flying ring which set the Guinness World record for the world’s farthest throw (1,333 feet).

(Notice the great example of soft-sell, inferred WOM throughout.)

Then they have a link to a list of walk-in and Internet retailers in the United States and internationally. When you go to those sites, you see other reviews, none of which is less than four stars and most of which are five stars. Furthermore, you can buy this thing for less than $30. (On an obnoxious, interruptive commercial it would be worded “not $1500 for an expensive espresso machine, not $1000, not $500, no not $250 or even $100. Yours for only one single payment of $25 plus shipping! Of course, on the AeroPress site, they only imply that it is inexpensive and let you be pleasantly surprised later.)

By the way, I learned on several of these other sites that Alan Adler participates in coffee discussion groups. Another a word-of-mouth lesson: join the discussion. I haven’t found any examples yet, but I’m sure he acts like an engineer and not a marketer: fact and evidence-based, reasonable, noticeable absence of hype, plenty of real-life examples, etc. One negative: he doesn’t have a blog yet; I’d subscribe in an instant.

Of course, I ordered it, paying a little extra at my favorite coffee site, Sweet Maria’s, so that I could take advantage of shipping efficiencies and trying a couple more examples of their extraordinary green beans. Sweet Maria’s is a wonderful example of how to differentiate your product through informational and educational enhancements. I use their example in word-of-mouth speeches all the time. More about them in some future posts.

How’s that for word of mouth? I got so excited that I’m posting about it before it even arrives! Of course, that’s several more lessons: when you get someone this excited, you better deliver the goods or you will have more than a disappointed ex-customer; you will have an angry one. Also, you can create an insanely great product in a mundane, niche market if you include all the right ingredients: On the one hand, it’s just a tube with a plunger. On the other hand, its years of dedicated experimentation, plus huge amounts of creative intelligence, plus a whole lot of other things, resulting in the extraordinary elegance and simplicity of a tube with a plunger that’s going to save me from countless horrible cups of coffee in hotel rooms. I can’t wait.

Update: Got so enthused, I spoke with their General Manager, Alex Tennant. He confirmed what I expected: Although he has an MBA in marketing, he is not a professional marketer — he runs the company. He and Alan, their engineer president, wrote all of the copy. No agencies involved. He says, ”Our aim is to create extraordinary products.“ These guys don’t have a separate marketing function. Or, to be more precise, their whole company is the marketing function: creating extraordinary products and then being straightforward in presenting them honestly, letting their products and their customers do the talking. How often does that happen? I’ve gotta meet these guys.

Further update: I’ve been using it for months now, and it’s the best coffee maker I’ve ever used. You have to get used to the taste (was a little disappointed at first) because there is absolutely no bitterness, so cream can overwhelm it unless used very sparingly. I now often drink it black, or with very little cream. Most people have never tasted really fresh-roasted coffee (between 1-7 days after roasting is the flavor peak). It’s a different experience. The problem is now that I can’t stand almost any coffee that I get anywhere else.

For the enthusiasts: As of now, my favorite is Sweet Maria’s Puro Scuro Blend green coffee (unroasted) roasted in the Behmor Coffee Roaster, then made in the AeroPress. Heaven.

One of the most frequent questions I’m asked in my speeches and interviews is, “Don’t all the word-of-mouth tools, such as feeds, blogs, the proliferation of other web sites, etc. cause chaos? There is so much crap out there, how do people sort it out?”

It turns out that WOM is a self-improving system (much more about this concept in upcoming posts — subscribe to this feed, I think they’re going to be spectacular!!!) People become infomediaries, screeners, reviewers, etc. Tools are developed to help people sort, filter and evaluate information and sources. We are in the beginning of the Information Revolution — the means for creating and delivery have gone through the roof (word processing, voice dictation, digital cameras on the creation side, and the web, cell phones, ebooks, etc. on the delivery side). But the means to manage these have lagged. So, Google results flood us, but we haven’t developed sufficient means for sorting out all the hits.

We are now seeing – and will continue to see at an increasing rate until the problems are sufficiently solved – a great deal of energy put into the invention of information management systems, as distinct from creation and delivery systems. These are becoming spectacularly popular, such as digg and del.icio.us. While they have been getting a lot of attention, I think their significance is underestimated.

I just stumbled upon a great one that I think will be the next very big hit: StumbleUpon

It’s an add-on to Firefox or Internet Explorer, and makes the switch from Safari to Firefox a no-brainer. It installs a toolbar and when you click on its Stumble button, it takes you to a website that fits your preferences, which you can continually adjust by rating the websites. The choices are uncannily interesting. It’s almost spooky. The selections are in your preferences (some of mine are marketing, magic, etc.) and they are the ones that are highest rated by other people. You can also rate web sites that you navigate to in the course of other browsing. It has built-in communities, ways of viewing other like-minded people’s selections, etc. It’s the most addicting thing I’ve found on the web in years: much better than digg and the others. It’s like having BoingBoing that is custom tailored to your interests. Beware, it’s highly addicting.

I have been so caught up in what I see as the nobility and purity of the word-of-mouth marketing movement that I’m shocked when people view word-of-mouth marketing as sleazy. I understand where they’re coming from and I sympathize with their strong condemnation of attempts to manipulate consumers, hype unworthy products and engage in a wide variety of other deceptive practices. But when someone as thoughtful as Jeff Jarvis weighs in on the side of the condemners, it’s time to weigh in. You can read what Jeff says, together with Andy Sernovitz’s and my answer here:

It seems to me that the main assumption underlying the criticism of word-of-mouth marketing is that any attempt to influence word of mouth is automatically bad. Word of mouth, in their view, should be organic and pure — and they’re right, at least about the pure part. I suspect that they are coming from a picture of shill marketing and other deceptive practices. As I’ve pointed out in “The Secrets of Word-Of-Mouth Marketing,” people react to any kind of manipulation or dishonesty in word of mouth much more strongly than dishonesty in advertising and salespeople. As well they should. Devious attempts to influence — manipulation — are expected of other forms of marketing. Salespeople and advertisers are expected to advocate their products in the best possible light. Lies by distortion, exaggeration and omission are expected and are reacted to with annoyed tolerance, not righteous indignation. Not whoppers, of course, but the over-enthusiasm of everyday advocacy. All of conventional marketing has a not-so-hidden agenda. I’m not excusing it’s inherent dishonesty; I’m just pointing out that we have a resigned and cynical tolerance, although we’re all increasingly tuning it out with a wide variety of tools.

Word of mouth is a different story. The whole idea of word-of-mouth is that trusted sources can be believed. Friends, colleagues and advisors are sacrosanct. Friends don’t lie to friends about product recommendations — maybe about the number and size of fish they caught, or about their sexual exploits — but not about recommending to friends what kinds of things are in their best interest. So, when people find out that their friends are recommending a product because they are getting an undisclosed commission, they are understandably outraged. They feel justifiably violated. The same thing is true about phony recommendations on Amazon, and all of the other sleazy word-of-mouth practices. Similarly, when people like Jeff Jarvis — who value journalistic integrity, truth, accuracy and transparency so highly — even contemplate the idea of word-of-mouth marketing, they see it as a vile oxymoron. the idea of a Word-Of-Mouth Marketing Association is even more hideous to them. They see devious and deceptive practices as poison in the pure and free marketplace of ideas, rightly so. Lies are lies, period. As Jeff points out, you only need one ethical principle in this area: Tell the Truth.

However, the critics have an accurate picture of only part of the truth. I would respectfully point out to them that a piece of the truth, when applied to the whole picture, can be a grotesque distortion — a lie. There are those of us for whom “honest marketing” is not an oxymoron, it is a redundancy. Word-of-mouth marketing, as distinct from word-of-mouth conning, is the art of making sure that products are so remarkable that people want to talk about them, getting out the word to influential people, and providing the means through which these influential people can spread the word. It is a profession that I am proud of. Millions of people are alive today and even larger numbers of people’s lives have been enhanced by the efforts of word-of-mouth marketers in the pharmaceutical industry alone. It’s not all about shill marketing and subservient chickens.

I thank Jeff and his readers for a much-needed reminder of the value of honesty and integrity, and of the need for everyone in the word-of-mouth marketing community and WOMMA to continue to fight deceptive practices.

As I predicted, it happened. I won’t rehash
the thousands of blog posts on the subject of running
Windows on the Intel Mac. For those who haven’t
heard, and for the record, Apple announced yesterday
an official version of a program that allows Windows
to run on the newer Macs with Intel chips and they
announced that it will be built into the next update
of their operating system.

Thousands of blog posts
were instantly posted yesterday. The announcement
made the front page of the New York Times and the
front page of the second section of the Wall Street
Journal today. All of this despite the fact that
Apple virtually hid the announcement: no usual big
splash, not on the home page of their web site, buried
in their web site. This, despite the fact that it’s
one of the biggest announcements in the computer
industry in the last decade.

The reason I’m talking about it here is because
it illustrates many word of mouth and other marketing
principles, and allows us to make many predictions.

As I’ve said before here and here, there is a huge disconnect
between the word of mouth for Macs and their actual
sales. Only about 2.6% of business users use Macs.
But more than half of them say that they would switch
to Macs if they could do so painlessly.

This illustrates the principle that word of mouth
is not enough. Word of mouth is only powerful because
it gets people past the decision blocks that conventional
marketing is not effective with. Issues having to
do with experience, credibility, simplification,
subtle interpretation, reassurance, encouragement
and real-world practical nuts and bolts. Advertising,
sales people and other conventional marketing methods
do not work very well on marketing blocks that involve
these issues. Friends, colleagues, experts and advisers
are much more helpful in these areas.

Now, there is a gradual way to switch to the Mac,
as I’ve described in previous posts.

My analysis of the Mac decision map has revealed
many blocks. The biggest one is the lack of a way
to try OS X and to switch to it gradually. This new
development is important because it wipes out these
blocks.

Word of mouth ultimately wins. Blatantly inferior
products like Windows, GM and Ford cars, AT&T
and Verizon long distance telephone service ultimately
lose because information transmitted independently
through word of mouth will ultimately overwhelm (in
both credibility and quantity) slick ads. It doesn’t
matter how big the company is. Especially when those
ads are insulting to customers. (For instance, depicting
them as dinosaurs, as Microsoft does.) These were,
and are, the largest companies in the world. It doesn’t
matter. Google may be headed in the same direction.
People love telling other people about new and better
search engines, and the cost for switching is very
low. For instance, ask.com and accoona.com have been
mentioned to me many times in the last week and I’m
actively trying them out, even though I love Google.

The cost of switching to Apple has always been high,
until now.

The takeaway here is to keep your eye on the steps
that people need to go through in the decision process.
This will reveal all sorts of blocks and opportunities
that will allow you to have very high prediction
accuracy.

Oh, yes, the predictions. The necessity to reboot
when switching between OS X and Windows is a huge
block. My guess is that it will not take more than
a few weeks, given the enormous interest shown, to
develop a switching program that does not require
a reboot. In fact, it may already be here. Today’s
Wall Street Journal mentions a beta program called
Parallels that purports to do this.

I predict that GM and Ford will continue to take
themselves into deeper holes before desperation causes
them to take some very bold moves. First there will
be the corporate financial moves, which may bring
them breathing room but will do nothing for their
sales. Then there will be some dramatic product quality
moves. I have no way of predicting whether these
moves will be too little or too late. I am very pessimistic,
because the only thing that will save them is to
turn around word of mouth. But they don’t even
begin to understand what word of mouth is, as evidenced
by the Tahoe CGM campaign. They’re just using
word of mouth as another manipulation. They need
to bring in the customer by having the customer help
them design the car, not the ads. They need to openly
and transparently share their commitment and steps
to solving the product quality problems.

That’s what Apple did. They paid attention
to the enormous desire of their customers to be able
to run Windows on their Macs for the few programs
that cannot be translated to OS X. The announcement
released an almost overwhelming torrent of word of
mouth. Sales will go through the roof because the
solution is already “good enough” and
will only get better.
Another prediction: there will be an enormous fight
the other way around. People will get OS X working
on Windows boxes. This will probably unleash a gigantic
fight from Apple. While I believe that they should
have the right to attach any conditions to the sale
of their programs, this would be a mistake. They
could sell a huge number of operating systems without
the machines. This would result in huge incremental
profit. Since they always seem to be able to stay
ahead of the other machines in features, quality
and attitude, they would compete very well on the
boxes, too. But only if they stay the “good
guy” and don’t turn people against them
by coercive actions.

Give the people what they want, don’t fight
their desires and their WOM, empower them to go the
next steps and don’t set up obstacles to what
they are going to do anyway. So far, so good.

The automaker says actual losses were $10.6 billion; company also says it will delay its annual report due to an accounting error.

March 16, 2006: 7:27 PM EST

DETROIT (Reuters) – General Motors Corp. on Thursday revised its loss for 2005 to $10.6 billion, $2 billion more than initially reported, due to charges associated with its restructuring, the bankruptcy of its former subsidiary Delphi Corp. and its finance arm GMAC.

Over 10 Billion dollar loss last year! See what happens when you: don’t thrill the customer, engage in hype marketing and lose the WOM battle? See what happens when your top executives get a new car every few months and never have to get regular maintenance — let alone repairs — at a regular dealer? See what happens when what you experience is totally different from what your customer experiences?

See what happens when you follow Jack Trout’s advice and rely on advertising to tell your positioning story? You know, the one that no one listens to, or that no one believes?